Suppose two firms compete in selling identical widgets. They choose their output levels Q1 and Q2 simultaneously and face the demand curve. P= 30 – Q, where Q = Q1 + Q2. Both firms have a marginal cost of 9. What are the market price, each firms production and profit levels?
Suppose two firms compete in selling identical widgets. They choose their output levels Q1 and Q2 simultaneously and face the demand curve. P= 30 – Q, where Q = Q1 + Q2. Both firms have a marginal cost of 9. What are the market price, each firms production and profit levels?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose two firms compete in selling identical widgets. They choose their output levels Q1 and Q2
simultaneously and face the
cost of 9.
What are the market price, each firms production and profit levels?
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Now suppose that an environmental regulation raises Firm 2’s costs to 18. Firm 1’s costs remain the same. Will Firm 1 become a
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